Subchapter S is a section of the Model Business Corporation Act that provides special benefits for small corporations.

Question

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Subchapter S refers to a section of the Internal Revenue Code that allows small corporations to elect a special tax status, enabling them to pass income directly to shareholders and avoid double taxation. It is not part of the Model Business Corporation Act, which is a model set of laws to guide states in the development of their corporate statutes.

Subchapter S Is a Section of the Model Business Corporation